WANKA ONLINE INC. 萬 咖 壹 聯 有 限 公 司* (Incorporated in the Cayman Islands with limited liability) （於開曼群島註冊成立的有限公司） （Stock Code 股份代號：1762） NOTIFICATION LETTER 通知信函 Dear Registered Shareholders, Wanka Online Inc. (the "Company") – Notice of publication of 2025 Interim Report (the "Current Corporate Communication") The English and Chinese versions of the Company's Current Corporate Communications are now available on the Company's website at www.wankaonline.com and the website of The Stock Exchange of Hong Kong L ...

Financial Performance - Revenue reached RMB 1,712.7 million, representing a year-on-year increase of 39.0%[18] - Gross profit was RMB 176.7 million, reflecting a year-on-year increase of 29.2%[18] - Adjusted EBITDA stood at RMB 73.9 million, marking a year-on-year increase of 7.6%[18] - Adjusted net profit amounted to RMB 51.8 million, showing a year-on-year increase of 10.3%[18] - Mobile advertising revenue surged by 42.7% to RMB 1,699.0 million, driven by an increase in the number of mobile games advertised[38] - Revenue for the six months ended June 30, 2025, increased by 39.0% to RMB1,712.7 million from RMB1,232.1 million for the same period in 2024[35] - Gross profit rose by 29.2% to RMB176.7 million, compared to RMB136.7 million in the previous year[35] - Profit for the period increased by 10.3% to RMB51.8 million, compared to RMB47.0 million in the same period last year[35] Market Trends - The gaming market saw 812 online games approved in the first half of 2025, the highest in five years[19] - Overseas revenue has doubled, with Chinese game developers' international income exceeding half of their domestic revenue[19] - The gaming market in China saw 812 new online games approved in the first half of 2025, the highest in five years, with expectations to exceed 1,500 for the entire year[20] - Overseas revenue has significantly increased, with Chinese game developers now earning over half of their income from international markets, indicating potential for further growth[20] Strategic Initiatives - The Group maintains strategic partnerships with six top-tier smartphone manufacturers, enhancing its competitive edge[19] - The group is collaborating with six top smartphone manufacturers, enhancing mobile advertising effectiveness through AI-driven marketing strategies[20] - The group plans to maintain a revenue growth rate in the second half of 2025 similar to that of the first half, focusing on omni-channel distribution and strengthening its presence in both Android and iOS ecosystems[25] - Investment in AI R&D will continue, with a goal to improve client retention rates and increase the proportion of overseas revenue[25] - The group is exploring the use of stablecoins for payments and evaluating the feasibility of packaging overseas accounts receivable into RWA Tokens for issuance on public blockchains[25] - The emergence of AI smartphones, particularly the iPhone 17, is viewed as a significant business opportunity for the next five to ten years, prompting proactive investment in related technologies[25] Operational Results - Selling and distribution expenses rose significantly by 151.4% to RMB38.4 million, compared to RMB15.3 million in the previous year[35] - Research and development costs increased by 25.8% to RMB38.5 million from RMB30.6 million in 2024[35] - Cost of sales increased by 40.2% from RMB1,095.3 million for the six months ended June 30, 2024, to RMB1,536.0 million for the six months ended June 30, 2025[52] - Gross profit margin decreased from 11.1% for the six months ended June 30, 2024, to 10.3% for the six months ended June 30, 2025[54] Equity and Assets - Total assets increased to RMB 2,678.3 million, representing a year-on-year growth of 15.0%[18] - Total equity reached RMB 1,551.0 million, reflecting a year-on-year increase of 9.9%[18] - Current assets increased by 14.7% to RMB 2,552.5 million as of June 30, 2025, compared to RMB 2,225.8 million as of December 31, 2024, mainly due to higher accounts receivable and prepayments[92] - Net current assets were RMB 1,428.3 million as of June 30, 2025, up from RMB 1,313.0 million as of December 31, 2024, indicating an increase of 8.8%[92] Shareholder Information - As of June 30, 2025, Mr. Gao Dinan holds 419,209,300 shares, representing a 23.68% long position in the Company[130] - Ms. Jiang Yu is a beneficial owner of 178,090,000 shares, which accounts for 10.06% of the Company's shares[130] - Wanka Media Limited, wholly owned by Mr. Gao, has a beneficial interest in 243,909,300 shares, equating to 13.78% of the Company[136] - The total number of shares issued as of June 30, 2025, is 1,770,343,350[135] Corporate Governance - The company complied with all applicable code provisions set out in the CG Code during the six months ended June 30, 2025[167] - The company has adopted the Model Code for securities transactions, and all Directors confirmed compliance during the reporting period[168] - The Company has established a risk management system to enhance long-term growth and sustainable development, with regular assessments of risk factors by each business unit[182] - The Audit Committee reviews the effectiveness of the risk management and internal control systems on an annual basis, ensuring compliance with relevant laws and regulations[177] Employee Information - The Group had 376 employees as of June 30, 2025, with remuneration determined based on experience, qualifications, and market conditions[188]

Investment Rating - The report suggests to "focus on" the company due to its strong revenue guidance and improving fundamentals [1][4]. Core Insights - The company, WanKa YiLian, is a mobile application store game advertising distributor, with 99% of its revenue coming from advertising in the first half of 2025. The stock price has increased by 491% year-to-date and 53% over the last 20 trading days, with an average daily trading volume of 25 million HKD [1][2]. - The company expects a revenue of 3.8 to 4 billion HKD for 2025, representing a year-on-year growth of 45% to 52% [1][4]. Summary by Sections Business Overview - WanKa YiLian's core business is mobile application store game advertising distribution, with mobile advertising revenue contributing 97% since 2021. The company collaborates with major smartphone manufacturers, linking over 2 billion devices [2][3]. Financial Performance - In the first half of 2025, total revenue reached 1.71 billion HKD, a 39% increase year-on-year. Mobile advertising revenue grew by 43%, outpacing the domestic mobile game market growth of 17% [2][9]. - The adjusted net profit for the first half of 2025 was 52 million HKD, a 10% increase year-on-year, with a net profit margin of 3% [2][9]. International Expansion - The overseas revenue in the first half of 2025 was 41.87 million HKD, a 4.4 times increase year-on-year, and is expected to accelerate in the second half of the year [3]. - The company aims to increase its overseas revenue contribution to 30% over the next three years, currently focusing on platforms like Apple and Xiaomi, with plans to support advertising on Meta, Google, and TikTok [3]. Strategic Partnerships - The company has entered a three-year strategic cooperation with Alibaba Cloud to enhance AI-driven marketing and smart terminal capabilities [3]. Shareholder Actions - A share buyback plan of up to 200 million HKD was announced, with 21.81 million shares repurchased as of September 5, 2025 [3]. Financial Outlook - The company projects a revenue of 3.8 to 4 billion HKD for 2025, with a mid-term goal of exceeding 10 billion HKD by 2029, implying a CAGR of 31% from 2024 to 2029 [4].

Group 1 - The article reports on stock buybacks conducted by various companies on September 5, 2025, with Tencent Holdings (00700) leading in both the number of shares repurchased and the total amount spent [1][2] - Tencent Holdings repurchased 913,000 shares for a total of 551 million, representing 0.558% of its total share capital [2] - Other notable companies involved in buybacks include China Hongqiao (01378) with 1.276 million shares repurchased for 31.57 million, and Midea Group (N23078) with 300,000 shares for 25.83 million [2] Group 2 - The total number of shares repurchased by China Hongqiao reached 146 million, accounting for 1.560% of its total share capital [2] - Midea Group's cumulative buyback for the year stands at 863,400 shares, which is 0.133% of its total share capital [2] - Other companies such as Yum China (09987) and MGM China (02282) also participated, with Yum China repurchasing 57,700 shares for 20.13 million and MGM China repurchasing 1 million shares for 15.78 million [2]

Core Viewpoint - Wanka Media Limited, owned by Mr. Gao, acquired 300,000 shares of Wanka Yilian (01762) at an average price of HKD 1.0233 per share, increasing his stake to approximately 24.01% of the company's issued share capital excluding treasury shares [1] Group 1 - Mr. Gao, the executive director, chairman, and a major shareholder, completed the acquisition on September 5, 2025 [1] - Following the acquisition, Mr. Gao holds a total of 420 million shares in the company [1] - Ms. Jiang Yu, the executive director, CEO, and another major shareholder, also acquired 300,000 shares at an average price of HKD 1.05 per share on the same date [1] Group 2 - After her acquisition, Ms. Jiang holds approximately 10.22% of the company's issued share capital, totaling 178.7 million shares [1] - Both acquisitions occurred on September 5, 2025, indicating a strategic move by key stakeholders to increase their holdings in the company [1]

Core Viewpoint - Wanka Media Limited, a wholly-owned entity of Mr. Gao, acquired 300,000 shares of Wanka Yilian (01762) at an average price of HKD 1.0233 per share, increasing his stake to approximately 24.01% of the company's issued share capital excluding treasury shares [1] Group 1 - Mr. Gao, the executive director, chairman, and a major shareholder, notified the board about the acquisition on September 5, 2025 [1] - Following the acquisition, Mr. Gao holds a total of 420 million shares in the company [1] - Ms. Jiang Yu, the executive director, CEO, and another major shareholder, also acquired 300,000 shares at an average price of HKD 1.05 per share on the same date [1] Group 2 - After her acquisition, Ms. Jiang holds approximately 10.22% of the company's issued share capital, totaling 178.7 million shares [1] - The acquisitions by both Mr. Gao and Ms. Jiang indicate a significant investment in the company, reflecting their confidence in its future prospects [1]

Group 1 - Wanka Media Limited, a wholly-owned entity of Gao Dinan, acquired 300,000 shares of Wanka Yilian (01762.HK) at an average price of HKD 1.0233 per share on September 5, 2025, increasing his total shareholding to approximately 24.01% of the company's issued share capital, excluding treasury shares [1] - Pioneer Horizons Holdings Limited, a wholly-owned entity of Jiang Yu, purchased 300,000 shares at an average price of HKD 1.05 per share on the same date, resulting in a total shareholding of approximately 10.22% of the company's issued share capital, excluding treasury shares [1]

Group 1 - The company, Wan Ka Yi Lian (01762), announced a share buyback plan [1] - The company will spend HKD 990,000 to repurchase 1 million shares [1] - The buyback price per share is set at HKD 0.99 [1]

Core Viewpoint - Wan Ka Yi Lian (01762) announced a share buyback plan, indicating confidence in its stock value and future prospects [1] Group 1 - The company will repurchase 1 million shares at a total cost of 990,000 HKD [1] - The buyback price per share is set at 0.99 HKD [1] - The repurchase is scheduled for September 5, 2025 [1]

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